Barnsley has been rebranded as Britain’s first “tech town”, with ministers unveiling plans to use artificial intelligence to improve local schools, healthcare and businesses as part of the government’s push to embed AI across the economy.

The designation was announced by the technology secretary Liz Kendall, who said the South Yorkshire town would act as a national testbed for “how AI can improve everyday life”. Under the initiative, US technology groups including Microsoft, Google, Cisco and Adobe will support the council as it expands the use of AI across public services and the local economy.

The programme will offer residents free AI and digital skills training, provide support for small businesses to adopt AI tools, and pilot new systems in healthcare and education. Plans include testing AI-assisted check-ins, triage and outpatient care at local hospitals, introducing AI tools in GP services, and trialling AI applications in schools and at Barnsley College to improve attainment and reduce teacher workloads.

Barnsley was selected in part because it has already moved faster than many areas in adopting AI. The council has used AI assistants in adult social care and children’s services, while sensor-equipped bin lorries have been deployed to scan roads for potholes. Logistics firm Evri, which operates a major distribution hub in the town, has also trialled robotic technology for deliveries.

Sir Stephen Houghton, Labour leader of Barnsley metropolitan borough council, said the initiative represented the biggest economic opportunity for the area since the decline of coal mining. “The economic basis of Barnsley was destroyed 30 years ago,” he said. “The future of the economy is technology, and being at the centre of that is an incredible opportunity.”

The precise financial arrangements with the technology companies remain unclear. Houghton said the council would not be paying them directly, and that some firms were expected to contribute on a pro bono basis. Microsoft already works with Barnsley College, and Google and Cisco are understood to be offering support without charge.

Kendall said lessons learned in Barnsley would inform a wider national rollout. “If we can show that AI helps young people learn, supports local businesses to be more productive, and improves public services, then we can show what’s possible for the whole country,” she said.

However, the initiative comes amid wider debate about the government’s relationship with big tech. Recent criticism has focused on the content of a new national AI training programme and the frequency of ministerial meetings with technology executives. The Department for Science, Innovation and Technology said hundreds of courses on its AI Skills Hub are free and all offerings are assessed against common quality criteria.

Local opposition figures welcomed the investment but warned of public concern. Hannah Kitching, leader of the council’s Liberal Democrat opposition, said there was anxiety about AI’s potential downsides, particularly among older residents. She added that while new opportunities were welcome, many people wanted the council to focus on basics such as road repairs and bin collections alongside its tech ambitions.